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There’s piracy, and then there’s piracy: Part one

This past week parts of the U.S. online participated in American Censorship Day. The day marked when the U.S. House of Representatives held a hearing on the Stop Online Piracy Act (SOPA). This act has come under heavy fire from various parts of the Internet world, such as Google and Yahoo. At the same time, the act has drawn support from content producers like NBC Universal, the Screen Actors Guild, Viacom, as well as business interests such as the U.S. Chamber of Commerce.

So what’s this legislation all about?

For decades, the movie studios, television networks, and record labels have battled the problem of piracy. Even before the days of the video cassette recorder (kids, ask your parents), movie studios worried that shady movie theater owners would make copies of the film prints they showed. If a theater owner made a bootleg copy, the owner could charge admission to a screening of a popular film and not share any of the receipts with the studio–which, of course, had bankrolled the film and took the risk that the film would be a flop. It’s hard to argue with the studio’s position: it invested the money on a risk, and it should be entitled to profit from a movie’s success.

Fast-forward to 2011, and the studios are freaking out about technology. Today, studios have to battle pirates who sneak small handheld video recorders into movie theaters to record the film. These bootleg copies are transferred to DVD and end up being sold on sidewalks in places like New York City and in mom-and-pop convenience stores in poor neighborhoods. The studios have a legitimate complaint about this practice: people who buy the bootleg DVDs don’t pay the theater owners and the studios don’t get their share of the consumer’s dollars.

Studios also have to battle pirates who take the bootleg copies and make them available through file sharing networks. Users who download the latest Harry Potter flick using Bittorrent or another protocol don’t pay the studio anything. Again, the studios have a point here. These are the sorts of problems that cause the movie studios and record labels to go to Congress and ask for help.

But the content producers don’t want help with only these problems. They want help from the Congress for problems that they think costs them money: people who exercise fair use of copyrighted content. These are the folks who make a home video of their toddler dancing to a song and share it with their family and friends on YouTube. The song is an incidental soundtrack, and no one seriously claims that the shared video is being listened to instead of a legitimate copy of the song. Nevertheless, the record label in this example freaked out and sent a notice to YouTube that the video must be removed because it infringed on the label’s copyright. (If you think I’m kidding, check out the details of Universal Music v. Lenz.) YouTube complied, and the person who posted the video filed suit against to establish that her use of the music (which can barely be made out due to the horrible quality) was a fair use. After four years of litigation, the case is still going so far as I know.

So which type of piracy is the bigger threat to the studios and labels? The acts committed by people who take the copyrighted content and sell it on the gray market (if not the black market)? Or is it the average person who posts a video to YouTube to share his or her creativity or humorous life moment? It would seem that the first category of people are the more serious threat, yet the studios and music labels want to use the force of federal law to go after the second as well.

The first group of people are definitely pirates. They copy desirable material like new music or movies and sell them for profit. The second group of people are not pirates. They aren’t making money, and the studios and labels aren’t losing money. Nevertheless, the content producers slap the “pirate” label on these folks as well and want them to be treated the same as real pirates.

In the next article on this topic, we’ll look at why this is a serious threat not only to reasonableness and common sense, but to the Internet as we know it as well.